The judgment on 28 February 2024 in Gortzen and Another v Moolman upheld a claim for damages for undisclosed defects brought by the buyer of a property against the sellers.  The undisclosed defects related to damp in the internal and external walls of the property and a crack in the swimming pool.  The court found that the sellers were aware of and covered up the defects, and were therefore liable despite the voetstoots clause in the sale agreement.

To succeed in proving the sellers liable, the buyer needed to prove that the damp constituted a latent defect that was not obvious nor patent to the buyer at the time of the sale, that the sellers were aware of the defects and their consequences and that they had deliberately concealed the defects with an intention to defraud the buyer.

The buyer bought the property from the sellers during December 2013 with transfer being effected in late February 2014.  While planning to renovate the property after having purchased it, the buyer discovered the damp that had not been disclosed and instituted action against the sellers.

The key issue before the court was whether the sellers were liable for the cost of repairing the defects causing the damp .  The sellers argued that they were unaware of the defects at the time of the sale and therefore not liable.  Crucially, the sale agreement contained a voetstoots clause.  Such a clause aims to protect the sellers of a property by binding the buyer to accept the property as it stands.  Where a sale agreement contains such a clause, a seller cannot be held liable for any patent or latent defects which they were unaware of at the time of the sale.

The high court dismissed the defence , for  three integral reasons.  Firstly, before the property was sold, significant paint repairs were done .  The sellers argued that this was an innocent attempt to “beautify” the property for its sale.  However, as a result of this beautification, the damp was concealed and thus constituted a latent defect that was not obvious nor patent to the buyer at the time of the sale.  Secondly, the sellers were aware of the need to beautify the property.  Whilst one of the sellers argued that they were unaware that the paint needed to be fixed due to damp issues, the court held that the fact that the seller was unaware of the true cause of the defect did not negate their attempt to conceal the defect.  The other seller argued that they were unaware of the defect at the time of the sale, as they had vacated the property many months prior to its sale.  This the court found to be insufficient.  The seller was aware of the defects when they left the property and did not bother to find out if the defect had been fixed in their absence nor did they bring the defect to the attention of the estate agent nor the buyer.  Finally, the sellers’ intention to defraud the buyer was established by the court based on their non-disclosure of the issues despite the fact that the sale agreement included a defects disclosure form and the sellers failed to list any issues.

Sellers must adequately disclose any possible defects.  It is insufficient for a seller to claim that they were not aware of a defect simply because they had failed to establish its true cause or because the defect may have been remedied without their knowledge.  The sellers in this instance were aware that something was wrong.  They ensured that the evidence of the defects was covered up and beautified before the house was sold.  Their lack of knowledge of the true issue, failure to remedy the true issue, or even point out the potential fact that there was an issue was irrelevant.

This blog was co-authored by Jessica Blunden, Candidate Attorney.